이 기사는 2020년 02월 14일 08:00 thebell 에 표출된 기사입니다.

National Pension Service (NPS), South Korea’s biggest pension fund, has changed its purpose of holding shares in some large-cap companies – including Lotte Shopping, one of the key affiliates of the country’s fifth largest conglomerate Lotte Group – seeking more active engagement with boards and management.

The NPS, the largest domestic institutional investor which owns more than seven percent of the country’s stock market, has changed its purpose of holding shares in 56 listed firms to “general investing,” which refers to investments involving shareholder engagement activity, from “non-engagement investing,” in which investors are simply interested in exercising shareholder rights given to them with no intention to exercise influence on the company's business administration, industry sources said Tuesday.

These firms are among 313 listed corporations, in which the public pension scheme holds a five percent or more stake. Lotte Shopping and Lotte Chemical, among Lotte affiliates, have been included in the list of 56 companies.

The NPS has continued to own about five percent of Lotte Shopping, the family-owned conglomerate’s flagship affiliate, for the past ten years or so. During this period, the pension fund has made continuous efforts to make its voice heard by exercising its rights to vote on a range of matters.

Especially in the last five years, the NPS ramped up its efforts on issues on the company’s board of directors. At Lotte Shopping’s shareholder meeting in March 2014, the pension fund voted against the appointment of Shin Dong-bin, Chairman of Lotte Group and a son of the group’s late founder Shin Kyuk-ho, and Shin Young-ja, a daughter of the founder, to the board of directors, due to overboarding concerns.

In 2015, the pension fund raised the same concern, criticizing then Honorary Chairman Shin Kyuk-ho for sitting on an excess number of boards of the group’s affiliates. At the company’s shareholder meeting in 2018, it also cast a vote against an agenda item that aimed at appointing Shin Dong-bin to the board of directors for the ninth consecutive period.

But all the previous attempts by the NPS ended in vain: Shin Kyuk-ho served as a director of Lotte Shopping for 38 years until his son, Shin Dong-bin, succeeded to full management control of the group, and Chairman Shin Dong-bin also has been serving as a director of Lotte Shopping over the last 20 years despite rising criticism.

“His strong management skills have contributed to the rapid growth of businesses within the group at home and abroad,” Lotte Shopping said about Chairman Shin who was re-elected as a director of the company at its annual shareholder meeting in 2018, adding that he was considered the right person to increase the company’s value through improvement in corporate governance.

Will this year be different? Chairman Shin stepped down as a director of Lotte Engineering & Construction, the group’s construction unit, last December. Lotte Corporation, the conglomerate’s holding company, explained the move was part of efforts to strengthen responsible business practices. But this is far from enough to conclude that the group is serious about addressing overboarding by members of the Shin family, which has been repeatedly criticized by the NPS.

Lotte Group appears to be cautious about saying anything. “Agenda items for Lotte Shopping’s 2020 shareholder meeting have not been finalized yet, so nothing has been decided with respect to the election of directors,” a representative of Lotte Corporation said.

(By reporter Jun Hyo-jeom)